Asia stocks rise on tariff relief; Hong Kong slides as AI, stimulus rally cools

 ​Asian stock markets exhibited mixed performances on March 25, 2025, as investors responded to easing tariff concerns and shifting market dynamics.​

Regional Market Highlights:

• Japan: The Nikkei 225 index advanced by over 1%, mirroring Wall Street's positive trend. This uptick was driven by optimism that U.S. tariffs would be more targeted than previously feared, bolstering investor confidence. ​

• Taiwan: Similarly, Taiwanese stocks experienced gains exceeding 1%, reflecting a broader regional sentiment of relief over trade tensions. ​

• Hong Kong: In contrast, the Hang Seng Index declined by 1%. The downturn was primarily attributed to profit-taking activities and a cooling off from previous rallies in the artificial intelligence and stimulus-driven sectors. Notably, carmakers led the decline as investors sought to capitalize on recent gains amid a lack of strong catalysts. ​

Investor Sentiment:

The easing of tariff worries has injected a degree of optimism into Asian markets, with indications that upcoming U.S. tariff policies may be less severe than initially anticipated. This development has encouraged a risk-on sentiment, leading to gains in various sectors. ​

However, some analysts remain cautious about the sustainability of this rally, suggesting that the market's positive reaction may be short-lived without substantial economic catalysts. ​

Currency and Commodities:

• U.S. Dollar: The dollar maintained its strength, reaching a three-week high against the yen, buoyed by solid economic data. ​

• Oil and Gold: Prices for oil and gold remained relatively stable, with minimal changes observed in the commodities market. ​

Overall, while the easing of tariff concerns has provided a temporary boost to certain Asian markets, the divergence in performance, particularly in Hong Kong, underscores the nuanced and cautious approach investors are adopting amid evolving economic indicators.